The stimulus plans have failed. On page 239 of the book, the author suggests that the Dow could fall to 5600 by 2014. This is a bitter pill to swallow, but it is more realistic than you might initially think. The baby boomers are retiring, and they will not be putting additional money on the line in a dubious stock market. They will also be selling their investments and using the cash for their retirements. In addition to individual cash-outs, the U.S. government will have plenty of financial problems along with the European nations. These factors will lead to many down days in the stock market. The best way to play this scenario is to buy a volatility index like TVIX for around $15 and sell it at $22. This pattern will also be repeatable for years to come.
Sunday, January 8, 2012
The Great Crash Ahead
Harry S. Dent has written a fascinating book on the economy and the stock market entitled The Great Crash Ahead. The book contains numerous charts and tables to explain why the stock market is heading down in the years ahead. The era of easy money is over, and society will never go that way again.
Subscribe to:
Post Comments (Atom)
John, hasn't Mr. Dent been one of the folks forecasting this for a long time based on demographics? I remember getting the sales pitch from a broker on funds using his scenario at least 15 years ago. Thanks for reading the books on economics and posting up your view.
ReplyDeleteCheers
Pete